Businesses post 2.6% drop in R&D spending

EU companies cut their research and development (R&D) investments by 2.6% in 2009, the new Industrial R&D Investments Scoreboard reveals. It is the first time that business R&D investments have fallen in a number of years. It should be noted, however, that sales and profits fell by 10% and 21% respectively, and that R&D investment decisions for 2009 were taken in late 2008, at the height of the financial crisis. Under these circumstances, the fact that R&D investments fell so little demonstrates the importance of R&D to businesses.

Published annually by the European Commission's Joint Research Centre, the Industrial R&D Investment Scoreboard brings together information on the R&D investments of the world's top 1,400 companies.

According to the 2010 edition of the report, companies worldwide cut their R&D investments by an average of 1.9%, less than the EU figure. Analysing the figures by region reveals that US companies reduced their R&D spending by over 5%, while Asian businesses boosted their R&D investments.

The report also highlights large differences between sectors. For example, the pharmaceuticals sector cemented its position as the leading R&D investor, increasing R&D by 5.3%. Another sector boasting an increase in R&D spending is the alternative energy sector, which posted a 28.7% increase in R&D investments. One sector which was particularly hard hit by the financial crisis was the automobile and parts sector, and its R&D investments dropped by 11.6%. Also reporting a fall in R&D spending was the technology, hardware and equipment sector (down 6.4%).

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